if-the-aggregate-expenditures-line-is-above-the-45-degree-line-what-adjustment-i

Question

If the aggregate expenditures line is above the 45-degree line, what adjustment is likely to occur in the economy?

Accepted Answer

Production will increase to match the higher level of spending.

Answer

The economy will experience deflation.

Answer

Production will decrease to match the lower level of spending.

Answer

The economy will experience a recession.